Cigna signage displayed at the company's headquarters in Bloomfield, Connecticut.

Whether or not the pending acquisition by Anthem goes through, Cigna's stock is undervalued, according to Stifel Nicolaus.

The investment bank started coverage of the health-services organization with a buy rating Monday after the market's close and set a $169 target for the shares, based on the current Anthem deal value.

Anthem agreed to acquire its health insurance rival in July for about $48 billion, which would create the country's largest health insurer. The companies are trying to win federal approval for the merger, but there is plenty of speculation that the deal may have hit some snags. Among them are concerns the deal will cause health-care premiums to rise for consumers and businesses.

"We expect [Cigna] to continue adding strategic components that improve its competitive position, either as a stand-alone organization or as a component of ANTM," Stifel said in a report.

The combination with Anthem is "unclear," the report said. If the deal succeeds, Cigna will provide additional leverage in pharmacy management negotiation.

If it fails, Cigna will have some structural work to do, but the shares may "paradoxically" rise, according to the report. Stifel estimates the stand-alone company's shares should trade at $155, which is still higher than its current market price of about $125 on Tuesday afternoon.